What you are now is skinny-fat. You can increase mass and reduce fat at the same time. Just control your diet. Avoid taking carbs and fatty food. Just take some quick carbs preworkout to get energy. But the rest let your body get energy by burning up fat.

If want more strict, stop taking rice. Rise is mostly carbs.

Why reduce carb intake? Because our body burn carb and fat for energy. If you have no more carb to spare, then they will use exclusively fat. That way you can reduce overall fat percentage.

And no, you cannot just target an area where you want the fat to be burned. Our body doesnt work that way. Just have to reduce OEVRALL fat percentage.